The Colorado Division of Insurance has nipped in the bud, for the time being at least, an effort by insurance companies to pressure policy holders to renew in advance of health-care reform rates that take effect next year.
Humana Inc., at the insistence of the division, on Sept. 20 sent a letter of apology to 3,400 of 12,000 policy holders whom it had warned could pay more for insurance when Affordable Care Act rates become effective Jan. 1.
A Humana letter dated Aug. 28 said policies had to be renewed by Sept. 28 or they would be canceled, division communications manager Vincent Plymell said Thursday.
“We hear from policy holders very quickly when incidents like this happen,” Plymell said.
A second letter from Humana that meets agency requirements was sent out Monday to all policy holders, Plymell said.
Humana sells individual and group health insurance.
Plymell said division investigators had talked to other health insurers about the same issues as Humana.
“We anticipated that health-care changes could cause some misunderstandings,” Plymell said.
As a result, the division in July issued regulations that outline what must be included in letters from carriers regarding upcoming changes.
The division’s sample letter for insurance companies covers myriad issues.
Insurers must tell policy holders that they can wait until 2014 to renew their current policy or enroll in a new plan during open enrollment.
The sample letter also requires telling policy buyers they can continue with their present company, buy from another company or buy through the new health marketplace where they might qualify for a tax rebate.
Health-insurance policies in effect before the Affordable Care Act was signed into law on March 23, 2010, can be renewed indefinitely and don’t have to meet conditions of the act.
The grandfathered policies tend to be more economical because they may not include 10 benefits required by the Affordable Care Act.
The Division of Insurance is a branch of the Department of Regulatory Agencies.
daler@durangoherald.com
